The gavel will pass to McCain (R-Ariz.) if Republicans hold on to the majority in the Senate come November, and the idea of his ascension to the top military committee post in Congress has some in the defense industry and lobbying shops on edge.

McCain, a former Navy pilot and Vietnam prisoner of war, is a constant critic of the Pentagon’s contracting and procurement tactics as well as of the pork-barrel projects that pepper the annual defense bills.

The industry does not see McCain as a strong supporter. Moreover, some industry representatives fear that McCain will use the new platform to grab headlines for his potential 2008 presidential bid.

Some sources in the defense industry argue that McCain is taking his oversight responsibilities to an extreme, assuming that everybody in the industry has ill intentions and that the Pentagon is a willing accomplice.

They acknowledge, however, that the Pentagon has been plagued with skyrocketing weapons costs and that changes in procurement practices and approaches will be necessary.

Nonetheless, “our life is going to be difficult,” said one source who asked not to be quoted by name.

So difficult, in fact, it’s already a running joke that McCain and Rep. Duncan Hunter (R-Calif.), chairman of the House Armed Services Committee, will have such serious differences of opinion that they won’t be able to pass a defense authorization bill.

“It’s the defense appropriations bill that holds the money,” one lobbyist pointed out.

All joking aside, congressional insiders predict that Hunter and McCain, two very strong, opinionated personalities with different agendas, will have a fair share of clashes during conference negotiations.

Those participating in conference proceedings would “have a seat at the greatest show on earth,” a knowledgeable source said.

“Both hold their views very strongly. They believe with the best of intentions in their position. But there is a very active and open exchange of views.”

Warner (R-Va.), with his stately, deliberate demeanor, enjoys a collegial relationship with Hunter. As the panel’s chairman, he focuses more on the big picture and strategic issues and lets the subcommittees deal with issues related to specific defense programs, the source said.

“McCain will take a more active role in the specific programmatic issue,” the source predicted. “Warner delegates those issues to the subcommittee chairs and deals with those problems that bubble to the surface.”

McCain left his imprimatur on the ill-fated Air Force lease with Boeing for midair-refueling tankers that he successfully thwarted two years ago. The lease scandal led to the resignation of the Air Force secretary and the imprisonment of two Boeing officials.

While McCain criticized the Air Force’s lease deal with Boeing, Hunter gave it his stamp of approval.

And with the possibility that contracts to renew the Air Force’s tanker fleet will be open to competition, Hunter attached a measure to a previous defense authorization bill that would have barred European giant Airbus, Boeing’s rival, to compete for the contract.

The tanker lease is not the only contract that McCain had in his crosshairs. McCain also has emerged as a staunch critic of the Air Force’s contract for the C-130J and the Army’s contract with Boeing for the Future Combat Systems, the service’s flagship program and a boon for the defense industry.

While differences in program funding and contracting can be mended in conference, McCain and Hunter have some philosophical differences. Hunter is a strong supporter of the Pentagon who “does not seem to question” it very often, while McCain takes a much “more independent” position, the knowledgeable source said.

“If a scandal breaks, Hunter will be more likely to defend and McCain is more likely to criticize,” the source said. Case in point: the controversy that erupted last year over the treatment of military detainees.

Hunter became the administration’s defender of U.S. conduct at detainee facilities at a time when human-rights organizations, internal FBI and military reports, and lawmakers were decrying the treatment of detainees at Guant